Interest-earning Chequing Accounts
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Interest-earning chequing accounts provide account holders with interest on the funds they have in the account. These type of chequing accounts are most common with digital banks that offer no-fee daily chequing accounts. The interest rate for these accounts can either be one rate or a tiered rate. Typically, interest is calculated at the end of each day and paid into the account monthly.
Common Account Features
Interest-earning chequing accounts typically have no monthly fee and no minimum balance. They may also offer unlimited deposit, withdrawals, and debit transactions as well as interest on the funds in the account.
Common Account Fees
The majority of providers that offer interest-earning chequing accounts are digital banks. Therefore, these accounts have no monthly fees but do have fees for additional services and features such as Interac e-Transfers.
When to Use an Interest-earning Chequing Account
An interest-earning chequing account is a good option if you tend to hold a high balance in your account. The majority of chequing accounts don't reward you for having a high balance in your chequing account. Typically, your monthly fee is waived but you earn 0% interest on your funds. Since the majority of interest-earning chequing accounts have no monthly fee and provide unlimited debit transactions, these accounts are a better option than unlimited accounts with monthly fees and no interest provided.
How to Save Money on an Interest-earning Chequing Account
With no monthly fees, interest-earning chequing accounts not only save account holders monthly fees, they also provide them money through interest earned on fund balances. The only way to save money in these accounts is by not conducting transactions that charge service fees.
When Not to Use an Interest-earning Chequing Account
If you require banking transactions that are deemed additional services on an interest-earning chequing account, this may not be the best option. For example, if you send many Interac e-Transfers every month, it may be wiser to have an account that has unlimited e-Transfers as you'll have to pay a fee for each one you send. Therefore, if you do many transactions that incur service fees, it may be worth your while to have an account that includes more of these features.